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The former head of the scandal-hit China Three Gorges Corporation, which built the world's biggest hydropower scheme, has been appointed deputy governor of Hubei province, two people familiar with the situation said.

The company released a statement late last month saying its chairman, Cao Guangjing, had been removed from his position and would be given another role, without providing further details. It also announced the removal of its general manager Chen Fei.

The announcement sparked intense speculation as it came a month after an inspection team announced they had discovered irregularities and nepotism in the corporation.

The company is believed to have close ties with former premier Li Peng , who saw the project as his political legacy. Li's family wields substantial power in the energy sector.

Cao, 50, left for Wuhan , Hubei's capital, to take up the deputy governor post on Thursday, the two sources said.

Chen, 51, would become deputy director of the Three Gorges Construction Office under the State Council, one of the sources said.

"The appointments indicate a soft landing for the two senior executives in the latest probe of Three Gorges," said the source. Their new roles lacked any real power compared with their previous jobs.

The second source said it was too early to conclude that Cao and Chen were no longer part of the corruption investigation, suggesting they might have been reassigned to ensure the investigation into the company could proceed without obstruction.

"Senior executives in state-owned enterprises can be daunting obstacles for graft-busters," the person said.

The two officials spent about 30 years in the hydropower industry and became involved in the planning of the dam in the 1980s.

Calls to the Hubei provincial government and the Three Gorges office went unanswered.

The leadership under President Xi Jinping has renewed a crackdown on corruption. The inquiry into Three Gorges follows an earlier anti-graft wave that swept through the oil industry.

Jiang Jiemin , the former chairman of China National Petroleum Corporation (CNPC), was detained last year for "serious discipline violations" months after taking on a new role to lead a cabinet agency overseeing state-owned enterprises. Earlier reports suggested the authorities removed Jiang in order to better investigate corruption at the oil firm.

The Communist Party's anti-graft watchdog said in February that some officials with China Three Gorges Corporation were guilty of nepotism, shady property deals and dodgy bidding procedures, without identifying them.

The company said in a statement it would look into the problems the inquiry raised and punish any violators.

In 2011, the State Council said the project suffered a range of problems. More than 1.3 million people were forced to relocate as waters rose behind the dam.